Salary tool · 2026 rules
What’s your real take-home under the 2026 tax law?
In January 2026 the Nigeria Tax Act 2025 replaced the old Personal Income Tax Act — new bands, the first ₦800,000 tax-free, and a rent relief instead of the CRA. Every salary calculator built before then now computes the wrong number. This one implements the new law exactly, and shows what the same salary paid under the old rules.
Monthly take-home
₦206,750
Annual take-home
₦2,481,000
PAYE per month
₦23,250
₦279,000 / year
Effective tax rate
9.3%
of gross salary
Where your tax comes from, band by band
The 2026 bands apply to your taxable income — ₦2,660,000 here, after ₦240,000 in deductions and ₦100,000 rent relief.
| Band | Rate | Your income in band | Tax |
|---|---|---|---|
| First ₦800,000 | 0% | ₦800,000 | ₦0 |
| Next ₦2,200,000 | 15% | ₦1,860,000 | ₦279,000 |
| Next ₦9,000,000 | 18% | ₦0 | ₦0 |
| Next ₦13,000,000 | 21% | ₦0 | ₦0 |
| Next ₦25,000,000 | 23% | ₦0 | ₦0 |
| Above ₦50,000,000 | 25% | ₦0 | ₦0 |
| Total annual PAYE | ₦2,660,000 | ₦279,000 | |
Old law vs new law — the same salary, both ways
What ₦3,000,000/year would have paid under the repealed PITA rules (with the Consolidated Relief Allowance), against what it pays under the Nigeria Tax Act 2025.
Before — PITA + CRA (to Dec 2025)
₦309,680/year
₦25,807/month
- Consolidated Relief Allowance
- ₦752,000
- Taxable income (old rules)
- ₦2,008,000
Now — Nigeria Tax Act 2025 (from Jan 2026)
₦279,000/year
₦23,250/month
- Rent relief
- ₦100,000
- Taxable income (new rules)
- ₦2,660,000
You keep ₦2,557 more per month under the 2026 rules — ₦30,680 a year.
The old-law figure is the standard PITA computation (CRA on the Finance Act 2020 gross-income definition, the 7–24% bands, and the 1% minimum tax where no taxable income remained). Rent has no effect on the old-law figure — rent relief only exists under the new Act.
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What changed in January 2026
- New bands, bigger tax-free slice. Six bands from 0% to 25% replaced the old 7%–24% scale. The first ₦800,000 of taxable income is tax-free (up from ₦300,000 taxed at 7%), and the 25% top rate only starts above ₦50 million.
- CRA is gone; rent relief is in. The Consolidated Relief Allowance — the old “₦200,000 + 20% of gross” relief everyone got — is repealed. In its place: 20% of the annual rent you actually pay, capped at ₦500,000. Renters only; you must declare your rent.
- Minimum-wage earners pay nothing. Employees earning not more than ₦70,000/month are no longer liable to tax or monthly PAYE deductions at all.
- Familiar deductions survive. Pension (Pension Reform Act 2014), NHF, NHIS, owner-occupied mortgage interest and life-insurance premiums remain deductible — now with documentation required.
The 2026 bands, as gazetted
Nigeria Tax Act 2025, Fourth Schedule — applied to taxable income after Section 30 reliefs. Transcribed from the Official Gazette and cross-checked against KPMG and PwC (sources below).
| Band | Annual taxable income | Rate |
|---|---|---|
| First ₦800,000 | ₦0 – ₦800,000 | 0% |
| Next ₦2,200,000 | ₦800,001 – ₦3,000,000 | 15% |
| Next ₦9,000,000 | ₦3,000,001 – ₦12,000,000 | 18% |
| Next ₦13,000,000 | ₦12,000,001 – ₦25,000,000 | 21% |
| Next ₦25,000,000 | ₦25,000,001 – ₦50,000,000 | 23% |
| Above ₦50,000,000 | over ₦50,000,000 | 25% |
For reference — the repealed PITA bands
| First ₦300,000 | 7% |
| Next ₦300,000 | 11% |
| Next ₦500,000 | 15% |
| Next ₦500,000 | 19% |
| Next ₦1,600,000 | 21% |
| Above ₦3,200,000 | 24% |
Plus CRA = higher of ₦200,000 or 1% of gross income, + 20% of gross income. Used only for the old-vs-new comparison above.
Sources
- Nigeria Tax Act 2025 — Official Gazette No. 117, Vol. 112 (Act No. 7) (26 June 2025)Fourth Schedule (new bands, p. A 542), s.30 deductions (p. A 417), s.203 commencement. Gazetted 26 June 2025; hosted by the Nigeria Revenue Service.
- KPMG GMS Flash Alert 2025-168 (15 September 2025)Independent confirmation of the six bands, the rent relief (20% of rent, ₦500,000 cap) and the CRA repeal.
- PwC Worldwide Tax Summaries — Nigeria (Individual) (last reviewed 29 May 2026)Bands, minimum-wage PAYE exemption (₦70,000/month), retained deductions, and the published old-vs-new comparison used for the old-law figures.
- EY Global Tax Alert — Nigeria Tax Act 2025 signed (30 June 2025)Confirmation of rent relief and of pension/NHF/NHIS remaining deductible (with documentation).
- PwC — Nigeria Finance Act 2020 alert (February 2021)The repealed CRA formula (higher of ₦200,000 or 1% of gross income, plus 20% of gross income) used in the old-law comparison.
All figures verified against these sources on 3 August 2026. The gazette is the primary source; KPMG, PwC and EY independently confirm the bands, the rent relief and the retained deductions.
Frequently asked questions
- What changed in Nigerian PAYE in January 2026?
- The Nigeria Tax Act 2025, signed on 26 June 2025, came into force on 1 January 2026 and repealed the Personal Income Tax Act (PITA). It introduced six new tax bands — the first ₦800,000 of taxable income is now tax-free and the top rate is 25% above ₦50 million — and replaced the Consolidated Relief Allowance (CRA) with a rent relief of 20% of annual rent paid, capped at ₦500,000. Any salary calculator built before 2026 uses the old bands and CRA, so its numbers are now wrong.
- How does the new rent relief work?
- You deduct 20% of the annual rent you actually pay, up to a maximum of ₦500,000, from your income before the tax bands apply. It replaces the old CRA and applies to renters only — homeowners get no equivalent relief. You must declare your annual rent, and the tax authority can request supporting documents.
- Do I pay PAYE if I earn ₦70,000 a month or less?
- No. Under the new Act, employees earning not more than the national minimum wage (₦70,000 per month) are no longer liable to tax or monthly PAYE deductions. Above that, the first ₦800,000 of annual taxable income is still taxed at 0%.
- Are pension, NHF and NHIS contributions still tax-deductible?
- Yes. Section 30(2)(a) of the Nigeria Tax Act 2025 keeps deductions for pension contributions under the Pension Reform Act 2014, National Housing Fund and National Health Insurance Scheme contributions, interest on a loan for an owner-occupied home, and life-insurance or annuity premiums. They must be claimed in writing with documentation.
Estimate only — not tax advice. This calculator is an educational estimate of PAYE under the Nigeria Tax Act 2025. It assumes a single employment income, approximates pension at 8% of gross (the statutory base is basic + housing + transport), and does not model benefits-in-kind, gratuities (taxability currently disputed pending official guidance), or other reliefs such as mortgage interest and life-insurance premiums. PAYE is administered by your state’s internal revenue service and state-level practice can differ. For decisions that matter, consult a professional — Nigeria’s top-ranked accountants are on Ranked.